Insiders who acquired HK$26.0m worth of Capital Realm Financial Holdings Group Limited's (HKG:204) stock at an average price of HK$0.69 in the past 12 months may be dismayed by the recent 23% price decline. Insiders invest with the hopes of seeing their money grow in value over time. However, as a result of recent losses, their initial investment is now only worth HK$8.07m, which is not what they expected.

Although we don't think shareholders should simply follow insider transactions, logic dictates you should pay some attention to whether insiders are buying or selling shares.

Check out our latest analysis for Capital Realm Financial Holdings Group

Capital Realm Financial Holdings Group Insider Transactions Over The Last Year

The insider Qiao Yun Zhang made the biggest insider purchase in the last 12 months. That single transaction was for HK$13m worth of shares at a price of HK$0.65 each. So it's clear an insider wanted to buy, even at a higher price than the current share price (being HK$0.21). Their view may have changed since then, but at least it shows they felt optimistic at the time. We always take careful note of the price insiders pay when purchasing shares. Generally speaking, it catches our eye when insiders have purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price.

In the last twelve months insiders purchased 37.90m shares for HK$26m. But they sold 23.07m shares for HK$14m. Overall, Capital Realm Financial Holdings Group insiders were net buyers during the last year. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. By clicking on the graph below, you can see the precise details of each insider transaction!

Capital Realm Financial Holdings Group is not the only stock that insiders are buying. For those who like to find small cap companies at attractive valuations, this free list of growing companies with recent insider purchasing, could be just the ticket.

Does Capital Realm Financial Holdings Group Boast High Insider Ownership?

I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Capital Realm Financial Holdings Group insiders own 41% of the company, currently worth about HK$75m based on the recent share price. Most shareholders would be happy to see this sort of insider ownership, since it suggests that management incentives are well aligned with other shareholders.

So What Do The Capital Realm Financial Holdings Group Insider Transactions Indicate?

It doesn't really mean much that no insider has traded Capital Realm Financial Holdings Group shares in the last quarter. On a brighter note, the transactions over the last year are encouraging. Judging from their transactions, and high insider ownership, Capital Realm Financial Holdings Group insiders feel good about the company's future. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. You'd be interested to know, that we found 3 warning signs for Capital Realm Financial Holdings Group and we suggest you have a look.

But note: Capital Realm Financial Holdings Group may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE and low debt.

For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulatory body. We currently account for open market transactions and private dispositions of direct interests only, but not derivative transactions or indirect interests.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.